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Wisdom or Madness? Comparing Crowds with Expert Evaluation in Funding the Arts Wisdom of the crowds is used mainly for prediction. The question arises whether we can use wisdom of the crowds for other purposes, besides prediction. The paper of Mollick & Nanda (2015) gives insights about wisdom of the crowds regarding crowdfunding for new ideas in a highly subjective environment (arts). Crowdfunding is an alternative to the traditional funding method of experts. The crowdfunding method involves democracy: Kickstarter reaches about six million people with a funding potential. Besides democracy, it also involves a loose organization, open and online communities, and it does not involve equity or monitoring rights. Nowadays, an increasing role is assigned to crowd decision-making at the cost of the expert. Surowiecki (2004) explains that aggregated answers of a large crowd are as good as, and often better than, the answer of a single expert. However, there is little known about the differences between the judgements of crowds and experts about whether or not to fund a new idea. Mollick & Nanda (2015) want to give insights in these differences between crowdfunding decisions, which rely on taste and judgment instead of prediction, and determine whether crowd decision-making is mad or wise (i.e. irrational and inconsistent or consistent in selecting successful projects). Although it is known from previous research that the wisdom of the crowd is potentially as good as, or better than, the wisdom of one single expert, wisdom of the crowd can be seen as madness. This is because groups or crowds might act in nonrational ways: they are subject to emotional contagion or hysterical reaction, which refers to the theory of group-thinking where people outweigh the opinions of their own group. Independency of the crowd is very important in wisdom of the crowd, however, when making crowd-based funding decisions, this independency is hard to maintain in a world of open and online communication. Based on the research of Mollick & Nanda (2015), projects where the crowd’s decision was to fund, were also more likely to be funded by the expert. The projects that were disagreed on (i.e. the crowd and the expert had different opinions about funding), it was much more likely that experts would not fund it, while the crowd did. Furthermore, the crowd’s opinion could be based upon some ‘art’ (e.g. videos and pictures) of these projects. Experts and crowds may differ in their assessment criteria of the funding decision. For the long term, the outcomes of the projects where there was congruence between expert and crowd and the projects where there was disagreement between them do not differ. Therefore, crowdfunding can lower the incidence of successful ideas being turned down. The findings suggest a great value of the crowd to making funding decisions. However, it does not imply that we should devalue the expert’s opinion. Furthermore, crowds and experts should be used as complementary sources of funding decision-making. Mollick, E., & Nanda, R. (2015). Wisdom or madness? Comparing crowds with expert evaluation in funding the arts. Management Science, 62(6), 1533-1553.